Revenue rose 7.2% from a year earlier, the slowest in five quarters, shows an analysis of the numbers from 175 companies that have reported results for the fiscal second quarter. Net profit growth at 2.5% was a six-quarter low, even as the operating margin of the sample group fell 1.5 percentage point to 20.9%.
If oil and gas companies are excluded, the pace of growth would accelerate to 10% for revenue and 6.7% for net profit.
In the oil and gas sector, Reliance Industries, the country’s largest company by revenue and market cap, and Mangalore Refinery and Petrochemicals Ltd (MRPL) have declared quarterly numbers so far. Reliance’s consolidated revenue remained flat from a year earlier at ₹2,35,481 crore, while net profit fell nearly 3% to ₹19,323 crore. For MRPL, revenue grew 26% to ₹28,785.9 crore, but MRPL, a subsidiary of the Oil and Natural Gas Corporation (ONGC), reported a net loss of ₹696.9 crore compared with a profit of ₹1,051.7 crore a year earlier due to a sharp drop in gross refining margin. These two companies together accounted for one-third of the sample’s revenue and 17% of its net profit.
Financial services companies including banks posted a 14% expansion in revenue and 13% increase in net profit. Excluding them, revenue of the sample goup grew 5.3%, but net profit fell 3.6% year-on-year. Lenders together contributed 23.2% to the sample’s revenue and 40.3% of net profit.
Analysts had anticipated tepid growth for corporate India in the second quarter, citing demand pressure. “Q2FY25 is set to be the first in seven quarters to see a decline in YoY and QoQ earnings, as domestic cyclicals may struggle to fully offset the persistent drag from commodity sectors,” Elara Securities (India) had said in a preview report.More companies from across sectors are scheduled to declare results in the coming weeks, which will make the trend clearer.